For those who have not been following the development of entity structures used to access capital markets for the renewable-energy industry, you might have missed the latest model to turn heads. But the Sol-Wind story is worth noting: It reminds us that capital markets are the true determinant of a structure's success — no matter how creative the structure dreamt up by securities lawyers and tax planners.

In December 2014, Sol-Wind Renew­able Power L.P. filed a Form S-1 for its initial public offering to issue $410 million (at the high end) in units. The capital was to be used to acquire interests in a 185-megawatt portfolio of solar- and wind-power assets from its general partner. The issuing entity is a limited partnership that holds the stock of a corporation that would in turn invest in tax-equity partnerships owning project limited liability companies. The Sol-Wind structure, simply put, is that of a master limited partnership (MLP) on top of a “yieldco.”

What drove this structure? “Yieldco” is a nickname referring to a corporation that projects high dividend distributions (yield), enabled by an absence of entity-level tax — not because the entity is not subject to corporate tax but because, as a practical matter, it expects to flow through so many tax benefits from its investment in renewable projects that its effective tax rate for the foreseeable future is zero. The net effect is ­comparable, from a cash-flow standpoint, to a structure in which solely pass-through entities are used to mimic the MLPs.